Why We Don’t Need Bosses Anymore

By Rod Collins

 

Whether we like it or not, the world where most of us grew up is quickly fading away. We now live in a wiki world where the power of networks and the speed of mass collaboration are redefining every aspect of our social lives, especially the work we do and the ways we work. There is little doubt that the technological innovations of the digital revolution will radically transform every industry. The only question is whether or not existing organizations will have the wherewithal to change as fast as the world around them. And that may be more challenging than business leaders realize, especially if present trends continue.

According to Nathan Furr, the replacement rate of the Fortune 1000 over a decade has recently doubled from 35 percent to 70 percent. If this rate were to remain constant, seven out of every ten companies on today’s Fortune 1,000 won’t be on the list in 2023. This means that it is highly doubtful that the vast majority of existing companies will have the capacity to change as fast as the world around them.

Getting in sync with the pace of change is challenging for so many companies because most organizations are designed as hierarchies, and even though many businesses have trimmed their layers of management, few have done away with their hierarchies. While there may be fewer bosses, the few who remain still call the shots in their organizations. When technology increasingly favors networks over hierarchies, the problem for business leaders isn’t that there are too many bosses, but rather that there are any bosses at all.

When we look around at the companies who are mastering the challenge of managing at the pace of change, there’s a strong likelihood that they won’t have hierarchies. For example, the tomato processor Morning Star, the video game developer Valve, and the makers of Gore-Tex—W.L. Gore & Associates—don’t have any supervisors. Each of these organizations is designed as a network where people are held accountable to their peers. Gore’s self-organized management approach is especially impressive because it has made a profit in every year since its founding in 1958. Over the past five years of financial turmoil, while others were cutting jobs, Gore added over 1000 associates to its payroll.

When technology strongly favors networks over hierarchies, an inevitable consequence is that we don’t need bosses anymore. In fact, the single greatest threat to the survival of most businesses today may very well come from their own bosses. While bosses have been a staple of hierarchical management, they have no place in the workings of a network. That’s because the new level efficiencies made possible by technologies of mass collaboration are only possible when workers have the tools to self-organize their work. In a hyper-connected world, professionals do not need supervisors overseeing the details of their work because today’s average knowledge worker knows the content of her job far better than her boss. In fact, the continual hovering of micromanaging supervisors is more likely to get in the way and slow things down than to add value and move things along. In the wiki world, power comes from being connected, not from being in charge.

The problem with most traditional companies is that those with the power are those who are in charge, and they will do everything they can to preserve their personal power within their organizations. Accordingly, they are reluctant to embrace any change that might diminish their corporate standing, which means they often unwittingly slow the company’s ability to keep pace with the world around them. While the strategy of preserving personal power may work in the short-term, it can be deadly for the company in the long-term if all the bosses make their personal positions a higher priority than their market positions.

In innovative companies, such as Morning Star, Valve, and Gore, those with power are those who are well connected with their teams. Thus, their focus is on making their teams as effective and powerful as possible in meeting the needs of their customers. As customer needs evolve and shift, they are more likely to respond to market movements because their power is directly derived from the ability of their teams to continually delight their customers. In networks, people work for customers rather than bosses, which is why they are able to more effectively change as fast as the world around them

If businesses leaders seriously want to manage at today’s accelerating pace of change, they cannot allow a good idea to be stopped by a single boss, or the value of a suggestion to be weighted by the position of the speaker, nor can they tolerate glacial bureaucracies that fail to keep pace with changing customer expectations or are too slow to recognize that customer values have shifted. The management architecture necessary to leverage the knowledge networks of mass collaboration only works when leaders derive their power from being connected rather than being in charge.

If business leaders want to make sure that their organizations can change as fast as the world around, they need to accept the new reality that you can’t lead twenty-first century businesses using a nineteenth-century management model. The digital revolution is not only changing the world around us; it’s also changing the way we manage that world. That’s why we don’t need bosses anymore.

Rod Collins is Director of Innovation at Optimity Advisors and author of the upcoming book, Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World (AMACOM Books, November 1, 2013)